Training new mantra to retain talent: Mercer

HR professionals can ill-afford to neglect the finding that companies in Asia-Pacific, which give preference to training and skill development over compensation packages, succeed in retaining talent.

The most successful companies today are those that are looking for more sophisticated ways to link 'total rewards' to support their business strategy, Mercer Asia Pacific Total Rewards Survey said.

"Investments in training and development of employees help the companies create 'employer brand' that differentiates them in the war of top talent making employees come and stay in such an organisation for longer periods," Mercer Asia Pacific human capital business leader Rajan Srikanth said.

'Total rewards' is a talent management strategy sketched around three factors - compensation including basic pay and incentives, benefits inclusive of retirement plans and work-life programmes, and careers that incorporate stretch assignments, training and development and other opportunities within the country.

Under this system, maximum weightage is given to training and development of employees as opposed to traditional systems where salaries and other monetary benefits were thought to be the most important factors to attract and retain employees.

"With the global war on talent showing no sign of relenting, organisations are striving to balance employee value proposition with more dollars on training and less on base pay to attract, retain and engage employees," Srikanth said.

As employers in the Asia-Pacific region compete for scarce talent with high demand skill sets, they are shifting some of the rewards investments focus to increase their competitive advantage.

Over 64% employers are investing primarily in training and career development followed by non-cash recognition awards at 43% with annual cash incentive coming third at 34% and base salary at 27% as a strategy used for retaining employees.

More than 92% employers who have adopted the practice have been able to attract and retain potential talent, especially in the areas of engineering, sales and marketing, as per the survey. However, 76% of the participating companies said that aligning the 'total rewards' strategy with the companies' business strategy was a difficult task, while 75% found segmenting and differentiating high performers to implement the reward strategies a challenging task.

The study examined the unique features of total rewards practice in over 750 organisations in the Asia-Pacific region across 12 markets and eight industries.